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Epic Games said it is laying off about 16% of its employees and is divesting Bandcamp and spinning off most of SuperAwesome.
“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic,” said Co-founder and CEO Tim Sweeney.
The number of employees to be laid off is about 900, according to a Bloomberg report.
Sweeney added that the company had been making efforts to reduce costs, including moving to net zero hiring and cutting operating spend on marketing and events but still ended up far short of financial sustainability. The company thus decided that layoffs were the only way, and that doing them now and on this scale would stabilize the finances.
About two-thirds of the layoffs were in teams outside of core development. However, Sweeney noted that some of the products and initiatives will land on schedule but some may not ship when planned because they are under-resourced for the time being.
In addition, Sweeney said that Bandcamp is joining Songtradr — a music marketplace company supporting artists. Meanwhile, SuperAwesome’s advertising business will become an independent company under the SuperAwesome brand, led by their current CEO Kate O’Loughlin.
Kids Web Services, the parent verification and consent management toolset, will remain part of Epic, according to Sweeney.
Earlier today it was reported that Apple (NASDAQ:AAPL) asked the U.S. Supreme Court to review a judge’s ruling from two years ago, which could impact revenue its App Store generates, allowing app developers to point users to alternative payment methods.
